 | This article needs additional citations for verification .(January 2020) |
| Industry | |
|---|---|
| Founded | July 2013 |
| Headquarters | Netherlands  |
Area served | Worldwide |
| Website | ghash |
GHash.io was a bitcoin mining pool subsidiary of CEX.io that operated from 2013-2016. The pool gained notoriety for briefly controlling more than 51% of bitcoin's computing power in 2014 (notable in that bitcoin was supposedly outside any party's control). [1]
GHash.io was founded and owned by CEX.io, a cryptocurrency exchange that continues to operate today. Apart from mining bitcoin, GHash.io hosted a multipool for mining altcoins, as well as separate pools for mining Litecoin, Dogecoin, Auroracoin, and Darkcoin. Altcoin mining options were available for independent miners, while bitcoin mining could also be done in the cloud by purchasing cloud-based mining power on CEX.io.[ citation needed ]
Traders on CEX.io could buy shares of GHash.io mining hardware to operate on the GHash.io mining pool. After GHash.io closed in 2016, CEX.io continued operating as a bitcoin exchange.[ citation needed ]
The possibility of a 51% attack was feared due to the popularity of GHash.io's mining pool. This kind of attack occurs when a single miner or mining pool is able to mine multiple bitcoin block rewards in a row. This would be a problem for the bitcoin network, because it hypothetically allows the mining pool to double-spend (counterfeit) bitcoins. [2] In July 2014, the GHash.io mining pool briefly exceeded the 51% threshold, which forced the bitcoin community to discuss the possibility of finding a common solution to this threat. [3] [4] The pool developing the majority caused a prominent bitcoin developer Peter Todd to sell half of his holdings. [5] The news reportedly caused bitcoin's price to drop from $633 to $600 at the time. [6]
Since no long-term solution to the 51% problem is known, the participants agreed to implement some temporary measures. GHash.io released a voluntary statement promising that it would not exceed 40% of the overall bitcoin hashrate. [7] Moreover, GHash.io representatives asked other mining pools to follow their example for the sake of the entire bitcoin community. [8] It also stated that a new committee should be created to act as a watchdog against the 51% problem. This committee would include representatives of the mining pools, bitcoin businesses and other specialists in the field.
The 51% discussion received broad coverage in the media, beyond publications which commonly focus on cryptocurrency news [8] ArsTechnica, [9] Bloomberg View, [10] Vice Motherboard, International Business Times. [11]
In March 2015, GHash.io was struck by a crippling DDOS attack, possibly in response to the group breaching 51%. [12] By the end of 2015, GHash.io had stopped its mining activity in response to falling bitcoin prices. [13] [14]
Proof of work (PoW) is a form of cryptographic proof in which one party proves to others that a certain amount of a specific computational effort has been expended. Verifiers can subsequently confirm this expenditure with minimal effort on their part. The concept was first implemented in Hashcash by Moni Naor and Cynthia Dwork in 1993 as a way to deter denial-of-service attacks and other service abuses such as spam on a network by requiring some work from a service requester, usually meaning processing time by a computer. The term "proof of work" was first coined and formalized in a 1999 paper by Markus Jakobsson and Ari Juels. The concept was adapted to digital tokens by Hal Finney in 2004 through the idea of "reusable proof of work" using the 160-bit secure hash algorithm 1 (SHA-1).
Double-spending is the unauthorized production and spending of money, either digital or conventional. It represents a monetary design problem: a good money is verifiably scarce, and where a unit of value can be spent more than once, the monetary property of scarcity is challenged. As with counterfeit money, such double-spending leads to inflation by creating a new amount of copied currency that did not previously exist. Like all increasingly abundant resources, this devalues the currency relative to other monetary units or goods and diminishes user trust as well as the circulation and retention of the currency.
Bitcoin is the first decentralized cryptocurrency. Nodes in the peer-to-peer bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight. Consensus between nodes is achieved using a computationally intensive process based on proof of work, called mining, that secures the bitcoin blockchain. Mining consumes large quantities of electricity and has been criticized for its environmental impact.
A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
Litecoin is a decentralized peer-to-peer cryptocurrency and open-source software project released under the MIT/X11 license. Inspired by Bitcoin, Litecoin was among the earliest altcoins, starting in October 2011. In technical details, the Litecoin main chain shares a slightly modified Bitcoin codebase. The practical effects of those codebase differences are lower transaction fees, faster transaction confirmations, and faster mining difficulty retargeting. Due to its underlying similarities to Bitcoin, Litecoin has historically been referred to as the "silver to Bitcoin's gold." In 2022, Litecoin added optional privacy features via soft fork through the MWEB upgrade.
The bitcoin protocol is the set of rules that govern the functioning of bitcoin. Its key components and principles are: a peer-to-peer decentralized network with no central oversight; the blockchain technology, a public ledger that records all bitcoin transactions; mining and proof of work, the process to create new bitcoins and verify transactions; and cryptographic security.
Dogecoin is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a joke, making fun of the wild speculation in cryptocurrencies at the time. It is considered both the first "meme coin", and more specifically the first "dog coin". Despite its satirical nature, some consider it a legitimate investment prospect. Dogecoin features the face of Kabosu from the "doge" meme as its logo and namesake. It was introduced on December 6, 2013, and quickly developed its own online community, reaching a peak market capitalization of over US$85 billion on May 5, 2021. As of 2021, it is the sleeve sponsor of Watford Football Club.
NXT is an open source cryptocurrency and payment network launched in 2013 by anonymous software developer BCNext. It uses proof-of-stake to reach consensus for transactions—as such, there is a static money supply. Unlike Bitcoin, there is no mining. NXT was specifically conceived as a flexible platform around build applications and financial services, and serves as basis for ARDR (Ardor), a blockchain-as-a-service multichain platform developed by Jelurida, and IoTeX (cryptocurrency) the current steward of NXT as of 2021. NXT has been covered extensively in the "Call for Evidence" report by ESMA.
In the context of cryptocurrency mining, a mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of finding a block. A "share" is awarded to members of the mining pool who present a valid partial proof-of-work. Mining in pools began when the difficulty for mining increased to the point where it could take centuries for slower miners to generate a block. The solution to this problem was for miners to pool their resources so they could generate blocks more quickly and therefore receive a portion of the block reward on a consistent basis, rather than randomly once every few years.
Monero is a cryptocurrency which uses a blockchain with privacy-enhancing technologies to obfuscate transactions to achieve anonymity and fungibility. Observers cannot decipher addresses trading Monero, transaction amounts, address balances, or transaction histories.
Ethereum Classic is a blockchain-based distributed computing platform that offers smart contract (scripting) functionality. It is open source and supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine (EVM).
Amit K. Bhardwaj was an Indian businessman who founded Amaze Mining and Blockchain Research Limited which ran GB [Gainbitcoin] Miners among other bitcoin-related businesses and projects, these have been described as various types of Ponzi schemes.
Bitcoin Cash is a cryptocurrency that is a fork of bitcoin. Launched in 2017, Bitcoin Cash is considered an altcoin or spin-off of bitcoin. In November 2018, Bitcoin Cash further split into two separate cryptocurrencies: Bitcoin Cash (BCH) and Bitcoin Satoshi Vision (BSV).
Bitmain Technologies Ltd., is a privately owned company headquartered in Beijing, China, that designs application-specific integrated circuit (ASIC) chips for bitcoin mining.
Cryptocurrency and crime describe notable examples of cybercrime related to theft of cryptocurrencies and some methods or security vulnerabilities commonly exploited. Cryptojacking is a form of cybercrime specific to cryptocurrencies that have been used on websites to hijack a victim's resources and use them for hashing and mining cryptocurrency.
Decentralized finance provides financial instruments and services through smart contracts on a programmable, permissionless blockchain. This approach reduces the need for intermediaries such as brokerages, exchanges, or banks. DeFi platforms enable users to lend or borrow funds, speculate on asset price movements using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts. The DeFi ecosystem is built on a layered architecture and highly composable building blocks. While some applications offer high interest rates, they carry high risks. Coding errors and hacks are a common challenge in DeFi.
Cryptojacking is the act of exploiting a computer to mine cryptocurrencies, often through websites, against the user's will or while the user is unaware. One notable piece of software used for cryptojacking was Coinhive, which was used in over two-thirds of cryptojacks before its March 2019 shutdown. The cryptocurrencies mined the most often are privacy coins—coins with hidden transaction histories—such as Monero and Zcash.
The environmental impact of bitcoin is significant. Bitcoin mining, the process by which bitcoins are created and transactions are finalized, is energy-consuming and results in carbon emissions, as about half of the electricity used is generated through fossil fuels. Moreover, bitcoins are mined on specialized computer hardware with a short lifespan, resulting in electronic waste. The amount of e-waste generated by bitcoin mining is comparable to that generated by the Netherlands. Scholars argue that bitcoin mining could support renewable energy development by utilizing surplus electricity from wind and solar. Bitcoin's environmental impact has attracted the attention of regulators, leading to incentives or restrictions in various jurisdictions.
GPU mining is the use of Graphics Processing Units (GPUs) to "mine" proof-of-work cryptocurrencies, such as Bitcoin. Miners receive rewards for performing computationally intensive work, such as calculating hashes, that amend and verify transactions on an open and decentralized ledger. GPUs can be especially performant at calculating such hashes.
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